External Affairs Minister S Jaishankar has emphasized the need for a prompt resolution to the review of India’s trade agreement with South Korea. He stressed the importance of both nations collaborating to identify additional “meeting points” and boosting their engagement to fully leverage their potential.
While speaking at the Korea National Diplomatic Academy in Seoul on March 5, External Affairs Minister S Jaishankar emphasized the necessity of intensifying engagement across various sectors to unlock the full potential between India and South Korea. He highlighted the importance of increasing political and strategic discussions to achieve this goal, stating, ‘To realize our potential, it is important we intensify our engagement in different spheres. Certainly, we need more political discussions, more strategic conversations – which is why I am here.
Jaishankar emphasized the necessity for stronger business connections and technology exchanges, stressing the urgency of expediting the long-pending review of the Comprehensive Economic Partnership Agreement (CEPA) between India and South Korea to facilitate its enhancement. He emphasized the importance of identifying more intersections and meeting points beneficial for both nations.”
“The minister’s visit to South Korea, from March 5-6, includes co-chairing the 10th India-Republic of Korea Joint Commission Meeting (JCM) with his counterpart Cho Tae-yul.
The Comprehensive Economic Partnership Agreement (CEPA) between India and South Korea, which came into effect in 2010, has been subject to discussions regarding its balance and equity. India has expressed the need for a more balanced and equitable agreement, while reports suggest specific demands such as increased market access in South Korea for products like steel, rice, and shrimp, while South Korea seeks greater access to India’s auto components and chemicals sectors.
Negotiations to ‘upgrade’ the CEPA are currently underway, with South Korea’s Ambassador to India, Chang Jae-bok, stating last week that both countries are optimistic about completing the talks in 2024.
In January, officials from India and South Korea held the 10th round of official negotiations to upgrade the CEPA.
India’s bilateral trade with South Korea witnessed a 9 percent growth in 2022-23, reaching $27.88 billion, although India continues to face a significant trade deficit. While India’s exports declined by 18 percent to $6.65 billion, imports from South Korea surged by 21 percent to $21.23 billion.
In the first nine months of 2023-24, the total bilateral trade between India and South Korea amounted to $20.92 billion. During this period, India’s exports decreased by 7 percent year-on-year to $4.76 billion, while imports from South Korea increased by 1 percent to $16.16 billion.
Beyond trade considerations, Jaishankar emphasized during his address at the Korea National Diplomatic Academy on March 5 that India and South Korea should acknowledge the strengths each brings to the table.
Today, we are all contemplating the prospect of a re-globalisation that would be very much shaped by emerging technologies. That gives our two nations the opening to progress ourselves while contributing to a better world,” stated the minister.
Addressing a question regarding India’s production-linked incentive scheme for semiconductor manufacturing, Jaishankar highlighted its role in enhancing domestic capabilities. He emphasized that while this initiative serves India’s interests, it also plays a crucial role in de-risking the global economy.
Today it is very dangerous for the world if production is too concentrated, if production is located in only a few geographies – I am making no judgement on the geography. But it is a risk any of us would counter,” Jaishankar explained.
You don’t want too many assets, too much production, too much dependence on a narrow source. So that is a big lesson from Covid – how to de-risk the global economy. And I would put that as different from what may happen in a competition between countries, that’s a different dynamic.